Question 1

James earns a degree from a top university and is hired by a prominent firm because executives at the firm believe that graduates of this university must have a high ability level or they would not have graduated. Which of the following theories of education do the executives believe?

Accepted Answer

A)  signaling theory
B)  human-capital theory
C)  compensating-differentials theory
D)  All of the above are correct.E) B) and D)
F) C) and D)

Question 2

Which of the following is an example of customer discrimination?

Accepted Answer

A)  European soccer players earn more than U.S. soccer players since soccer is more popular in Europe.
B)  Male basketball players in the NBA earn higher salaries than female basketball players in the WNBA since viewers prefer watching NBA games.
C)  Golfers on the men's PGA tour earn more than golfers on the women's LPGA tour since people prefer watching the men play golf.
D)  All of the above are examples of customer discrimination.E) B) and C)
F) A) and D)

Question 3

Scenario 19-6​
The after-school tutoring industry is competitive, and so is the labor market for after-school tutors. Suppose male and female tutors have equal experience and skill. Currently, some tutoring centers are biased and will only hire male tutors, while unbiased tutoring centers desire to hire the cheapest tutors and do not care about their genders. As a result, the equilibrium wage for male tutors is higher than that of female tutors.
-Refer to Scenario 19-6. If consumers do not discriminate between male and female tutors, then

Accepted Answer

A)  the equilibrium wage for male and female tutors will eventually be identical.
B)  the equilibrium wage for female tutors will eventually fall.
C)  the equilibrium wage for male tutors will eventually rise.
D)  the equilibrium wage for male and female tutors will remain different, even in the long run equilibrium.E) A) and B)
F) All of the above

Question 4

Studies have shown that union workers earn about

Accepted Answer

A)  10 to 20 percent more than nonunion workers in similar jobs.
B)  10 to 20 percent less than nonunion workers in similar jobs.
C)  40 to 50 percent more than nonunion workers in similar jobs.
D)  40 to 50 percent less than nonunion workers in similar jobs.E) None of the above
F) A) and C)

Question 5

Construction work is much riskier than working as a server at a restaurant. As a result, we'd expect a difference in wages between the two jobs. The difference is known as

Accepted Answer

A)  an efficiency wage.
B)  a compensating differential.
C)  a wage adjustment.
D)  a minimum wage.E) A) and B)
F) All of the above

Question 6

In what way do competitive markets have a "natural remedy" for discriminatory hiring practices?

Accepted Answer

A)  Governments regulate to resolve problems of discrimination.
B)  Profit-maximizing firms that do not discriminate tend to replace firms that discriminate.
C)  Wages paid to groups that are victimized by discrimination are eventually bid up to above-equilibrium levels.
D)  Discrimination is usually the outcome of rational decision-making processes, and competitive markets produce rational outcomes.E) B) and C)
F) A) and C)

Question 7

A competitive market may be consistent with a discriminatory wage differential if

Accepted Answer

A)  firms' customers have discriminatory preferences.
B)  the wage differential is explained by a compensating differential.
C)  the wage differential is explained by differences in human capital.
D)  All of the above are correct.E) A) and D)
F) All of the above

Question 8

Who among the following individuals most likely experiences the largest nonmonetary reward as a supplier of labor? Assume all of the four individuals have the same level of education and work the same number of hours per week.

Accepted Answer

A)  Albert, who prefers not to socialize and works at home by himself
B)  Amy, whose job provides little intellectual and personal satisfaction
C)  Antoinette, whose preference is to avoid dangerous work but works as a firefighter
D)  Arnold, who works the night shift but would prefer to work during the day and sleep at nightE) B) and D)
F) A) and B)

Question 9

Which of the following does not explain the "beauty premium" differences in wages?

Accepted Answer

A)  Better-looking people are preferred by customers; thus, employers will pay them higher wages than average-looking people.
B)  Beauty may be an indirect measure of other abilities that employers value.
C)  Average-looking people are preferred by customers; thus, employers will pay them higher wages than better-looking people.
D)  Employers discriminate in favor of better-looking people.E) B) and C)
F) A) and C)

Question 10

A college degree makes a person more productive according to

Accepted Answer

A)  both the human-capital and the signaling theories of education.
B)  the human-capital but not the signaling theory of education.
C)  the signaling but not the human-capital theory of education.
D)  neither the human-capital nor the signaling theory of education.E) B) and D)
F) B) and C)

Question 11

Nancy and Sheila are both loan officers who started working for their current employer during the same year, graduated from the same university with bachelors' degrees in economics, and achieved similar performance reviews. Nancy earned a master's degree last year. If Nancy earns a higher annual salary than Sheila because she has more formal education, the employer is

Accepted Answer

A)  basing pay on experience.
B)  paying efficiency wages.
C)  practicing discrimination.
D)  rewarding increases in human capital.E) None of the above
F) All of the above

Question 12

A study of segregated streetcars in the southern United States in the early twentieth century found which of the following?

Accepted Answer

A)  Firms that ran the streetcars were more interested in segregating customers by race than profits.
B)  The firms that ran the streetcars were unanimous in their support of laws that required segregation of races.
C)  Before the passage of laws that mandated segregation of races on streetcars, segregation of smokers and nonsmokers was more common than segregation of races.
D)  Segregation based on gender was more common than race at first.E) B) and C)
F) A) and C)

Question 13

In the experiment conducted by economists Muriel Niederle and Lise Vesterlund

Accepted Answer

A)  men were better at adding than women.
B)  women chose the tournament payoff scheme more than men.
C)  men thought they won the four-player tournament part of the experiment more often than women thought they won the four-player tournament.
D)  the researchers demonstrated that women face significant wage discrimination in stock brokerages.E) A) and D)
F) A) and B)

Question 14

Why do economists study sports teams when looking for evidence of labor-market discrimination?

Accepted Answer

A)  because the salaries paid to professional athletes exhibit the superstar phenomenon, which is highly correlated with discrimination
B)  because all four United States professional sports leagues (football, basketball, hockey, and baseball)  require discrimination studies every five years
C)  because nonwhites comprise a majority of starters for many professional sports teams
D)  because the wide availability of performance statistics allows economists to control for individual player productivity in ways that are difficult to do for other types of firmsE) None of the above
F) B) and D)

Question 15

Scenario 19-1
Ferris B., a student at a community college, is considering what he should do for summer employment. Two recruiters show up at his school in search of summer workers. Recruiter A is looking for lifeguards to patrol the beach at an exclusive island resort in the Caribbean. Recruiter B is looking for workers to staff positions at a summer youth camp.
-Refer to Scenario 19-1. Ferris is carefully considering the options that each recruiter presents. On the basis of knowledge obtained in his economics class, Ferris concludes that

Accepted Answer

A)  wages are unlikely to be affected by job requirements.
B)  since the lifeguard job would expose him to a threat of skin cancer, the wage will be low.
C)  if the lifeguard job has a requirement for special training or certification, the wage offer will be higher than otherwise.
D)  if the lifeguard job also requires a willingness to clean public restrooms, the wage offer will be lower than otherwise.E) All of the above
F) A) and B)

Question 16

According to research by Bertrand and Mullainathan, which job applicants, those with "white" names or those with "black" names, received more calls from interested employers? What percent more?

Accepted Answer

The answer of According to research by Bertrand and Mullainathan,...

Question 17

Air-traffic controllers get paid high wages given their level of education. They also get frequent breaks and may only work a few days a week. Which of the following could explain their high wage?

Accepted Answer

A)  the long breaks and limited work days
B)  the stress they face
C)  the comparatively low level of education required
D)  All of the above are correct.E) A) and C)
F) B) and D)

Question 18

According to the superstar phenomenon, the most talented person in which of the following occupations is most likely to earn extremely high wages?

Accepted Answer

A)  an electrician
B)  a hair stylist
C)  a journalist
D)  an engineerE) A) and B)
F) B) and C)

Question 19

Differences in human capital among workers can often be attributed to social or political processes rather than economic processes.

Accepted Answer

A) True 
 B)False

Question 20

A natural correction to employer discrimination in market economies is the

Accepted Answer

A)  threat of judicial review.
B)  profit motive.
C)  political process.
D)  union movement.E) None of the above
F) C) and D)

Exam 19: Earnings and Discrimination

A study of segregated streetcars in the southern United States in the early twentieth century found which of the following?

Correct Answer
verified

Air-traffic controllers get paid high wages given their level of education. They also get frequent breaks and may only work a few days a week. Which of the following could explain their high wage?

Correct Answer
verified

Studies have shown that union workers earn about

Correct Answer
verified

Why do economists study sports teams when looking for evidence of labor-market discrimination?

Correct Answer
verified

Who among the following individuals most likely experiences the largest nonmonetary reward as a supplier of labor? Assume all of the four individuals have the same level of education and work the same number of hours per week.

Correct Answer
verified

A competitive market may be consistent with a discriminatory wage differential if

Correct Answer
verified

James earns a degree from a top university and is hired by a prominent firm because executives at the firm believe that graduates of this university must have a high ability level or they would not have graduated. Which of the following theories of education do the executives believe?

Correct Answer
verified

Construction work is much riskier than working as a server at a restaurant. As a result, we'd expect a difference in wages between the two jobs. The difference is known as

Correct Answer
verified

In the experiment conducted by economists Muriel Niederle and Lise Vesterlund

Correct Answer
verified

According to the superstar phenomenon, the most talented person in which of the following occupations is most likely to earn extremely high wages?

Correct Answer
verified

Correct Answer
verified

A college degree makes a person more productive according to

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

In what way do competitive markets have a "natural remedy" for discriminatory hiring practices?

Correct Answer
verified

Which of the following is an example of customer discrimination?

Correct Answer
verified

According to research by Bertrand and Mullainathan, which job applicants, those with "white" names or those with "black" names, received more calls from interested employers? What percent more?

Correct Answer
verified

Which of the following does not explain the "beauty premium" differences in wages?

Correct Answer
verified

A natural correction to employer discrimination in market economies is the

Correct Answer
verified

Differences in human capital among workers can often be attributed to social or political processes rather than economic processes.

Correct Answer
verified

Exam 19: Earnings and Discrimination

A study of segregated streetcars in the southern United States in the early twentieth century found which of the following?

Correct AnswerverifiedShow Answer

Air-traffic controllers get paid high wages given their level of education. They also get frequent breaks and may only work a few days a week. Which of the following could explain their high wage?

Correct AnswerverifiedShow Answer

Studies have shown that union workers earn about

Correct AnswerverifiedShow Answer

Why do economists study sports teams when looking for evidence of labor-market discrimination?

Correct AnswerverifiedShow Answer

Who among the following individuals most likely experiences the largest nonmonetary reward as a supplier of labor? Assume all of the four individuals have the same level of education and work the same number of hours per week.

Correct AnswerverifiedShow Answer

A competitive market may be consistent with a discriminatory wage differential if

Correct AnswerverifiedShow Answer

James earns a degree from a top university and is hired by a prominent firm because executives at the firm believe that graduates of this university must have a high ability level or they would not have graduated. Which of the following theories of education do the executives believe?

Correct AnswerverifiedShow Answer

Construction work is much riskier than working as a server at a restaurant. As a result, we'd expect a difference in wages between the two jobs. The difference is known as

Correct AnswerverifiedShow Answer

In the experiment conducted by economists Muriel Niederle and Lise Vesterlund

Correct AnswerverifiedShow Answer

According to the superstar phenomenon, the most talented person in which of the following occupations is most likely to earn extremely high wages?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A college degree makes a person more productive according to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In what way do competitive markets have a "natural remedy" for discriminatory hiring practices?

Correct AnswerverifiedShow Answer

Which of the following is an example of customer discrimination?

Correct AnswerverifiedShow Answer

According to research by Bertrand and Mullainathan, which job applicants, those with "white" names or those with "black" names, received more calls from interested employers? What percent more?

Correct AnswerverifiedShow Answer

Which of the following does not explain the "beauty premium" differences in wages?

Correct AnswerverifiedShow Answer

A natural correction to employer discrimination in market economies is the

Correct AnswerverifiedShow Answer

Differences in human capital among workers can often be attributed to social or political processes rather than economic processes.

Correct AnswerverifiedShow Answer

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